Apartments for rent in Tampa Florida
CLOSING DISCLOSURE PAGE 1
Ok... let's break this first page down section by section.
This is the introduction section that displays the...
1. Date of the transaction
2. The title company that will handle the transaction
3. The location of the transaction
4. The sales price of the transaction.
This is the introduction section that displays the...
1. Contact information of the borrower (buyer)
2. Contact information of the seller
3. Who the lender is who is giving the loan
This is the introduction section that displays the...
1. This shows how long the loan term will last.
2. This shows the purpose of this transaction which is a purchase.
3. This show what type of interest rate this is. Will it be either a fixed rate or an adjustable rate? A fixed interest rate never changes. An adjustable interest rate will go up and down by a few points throughout the loan life which will affect the monthly payment amount.
4. This shows what type of loan this is. Conventional is the most common. This type of loan usually has less risk for the lender because the borrower drops down a large down payment up to 20% down. This shows the lender that they are not a flight risk and they have money to mke payments. FHA is moe risky and has a lower down payment close to 3.5%. VA is a loan for military veterans which has a 0% down payment.
- Loan Amount - This shows exactly how much you are financing and will pay back.
- Interest Rate - This shows your correct interest rate which is the fee you will pay each month, in addition to the full monthly payment, for the privelage of having the opportunity to get and pay back the loan amount.
- Monthly Principal & interest This is the total amount you will pay each month. The principal is the monthly payback amount from the loan amount. The interest is the monthly fee.
- Prepayment Penalty - This is the fee youwill pay if you pay off the ENTIRE loan amount early. This happens all the time when a borrower,like yourself, wants to buy a new house and they sell their current one.
- Balloon Payment - This is when the borrower's monthly payments are paying ONLY the interest rate monthly fee and nothing toward the loan amount. Months later, the full loan amount is due and the borrower has to pay the FULL loan balance. This is a strategy used for someone who plans on staying in the property for a short period of time and it keeps the monthly payment low. The danger is that if the borrower stays too long in the property... Well.... that balloon will pop and now they either owe the full amount or they will have to give up the property (foreclose).
This is the projected payment section that breaks down the money the borrower will have to pay ment month.
- Principal and Interest - This show the monthly payment of the loan which includes the principal and the interest combined.
- Mortgage Insurance - Insurance is paid because of risk. The risk is for the lender that you the borrower will have to pay for the protection of the lender in case you the borrower fails to pay your loan back.
- Estimated Escrow - This is money set aside is a special savings accout that you the borrower pays that will go toward paying your annual home owners insurance and annual property taxes. The home onwers insurace protects the physical building from damages and the property taxes are paid to the county of the property that goes toward county sesrvices like the school system, police, loal government, libraries, fire departments, etc.
- Estimated Taxes, Insurance & Assessments - This the combinatin of the estimated escrow amount plus the assessment fees. Assessment fees are extra work the city performs in the city to improve neighborhood streets that is charged to the homeowners.
NOTE: This particular transaction does not include Homeowners Association Dues which is mainly for deed restricted subdivisions.
This is the section that summarizes the cost you the borrower needs to bring to the closing table.
- Closing Cost - These are the fees you will have to pay to the lender and other venders to buy a property. These fees will be itemized and explained on the next few pages.
- Cash to Close - This is the amount you the borrower will need to bring to the closing table. This is usually the down payment amount minus your earnest money that you have already paid. I will explain in more detail later.
